Butler was born in Kilkenny, Ireland, son of Michael Butler, farmer, and his wife Mary, née Joyce. He was educated at St Kieran's College intending to become a priest, according to Thomas Carlyle. During the Potato Famine he became a journalist and supported Young Ireland as the editor of the Galway Vindicator. Young Ireland attempted to build an Irish national movement that included Catholics and Protestants and campaigned for a common educational system for all denominations.[1]

Butler found that his ambitions to be trained as a lawyer were blocked in Ireland because of his Catholicism and he migrated to Sydney, arriving in May 1853, where he found work writing for Henry Parkes' Empire. He was admitted as a barrister in 1855 and was appointed as a crown prosecutor for the metropolitan and coast district in 1857. In 1858 he married Ellen Mary Connolly and they had four sons and five daughters.[1]